NABARD Rural Pulse

Issue - I, Jan. - Feb. 2014

Agricultural Land Holdings Pattern in India

The last four decades has witnessed a sharp decline in the average size of operational
land holdings in India. This is reflective of the immense population pressure on the limited
land resource available for cultivation. This issue of NABARD Rural Pulse attempts to
capture the challenges posed by declining land holdings in the farming hinterlands of the
country. It attempts to draw a few inferences based on these trends and proposes a few
policy options that are available for consideration.
This brief looks at the trends and patterns in
average size of land holdings. The average size of
operational land holdings has reduced by half from
2.28 ha in 1970-71 to 1.16 ha in 2010-11 (Graph I).
Consequently, the number of land holdings in the
marginal and small categories have swelled by 56
million and 11 million respectively, during the same
period (Graph 2). The size of the land holdings
has implications for investments in agriculture, its
productivity, farm mechanisation and sustaining farm
incomes itself.
Land holdings in the marginal category (less than1 ha.)
constitute 67 per cent of the operational holdings in
the country (2010-11). In terms of area operated, the
share of marginal holdings has doubled to 22 per cent
(2010-11) from a mere 9 per cent (1970-71). Similarly,
the share of(operated area under) small farm holdings
(1 to 2 ha) increased from 12 per cent to 22 per
cent during the same period (Graph 3). Small and
marginal holdings together, constitute 85 per cent
in terms of number of operational holdings and
44 per cent of the operated area in the country
(Graph 5 to 8, page 2). Thus, over the period,
the marginal category has emerged as a distinct
and dominant class by itself with its average
size dwindling to a mere 0.38 ha. (see Table).

Department of Economic Analysis and Research

Category wise average size of holdings - All India ( in ha)

Category of
Farmers

1970- 1976- 1980- 1985- 1990- 1995- 2001- 2005- 2010%

71
77
81
86
91
96
02
06
11 Change#

Marginal
(less than 1 ha)

0.41

0.39

0.39

0.39

0.4

0.4

0.4

0.38

0.38

-7.89

Small
(1.0 to 2.0 ha)

1.44

1.42

1.44

1.43

1.44

1.42

1.42

1.38

1.42

-1.41

Semi-medium
(2.0 to 4.0)

2.81

2.78

2.78

2.77

2.76

2.73

2.72

2.68

2.71

-3.69

Medium
(4.0 to 10.0)

6.08

6.05

6.01

5.95

5.9

5.84

5.81

5.74

5.76

-5.56

17.3 17.21 17.12 17.08 17.38

-3.97

Large
(10.0 and above)
All Groups

18.07 17.57 17.38 17.19

2.28

2.00

1.84

1.69

1.57

1.41

1.33

1.23

1.16

-96.55

Source: Calculated from Agricultural Census, various rounds, GoI

# : 2010-11 over 1970-71

NABARD Rural Pulse

Issue - I Jan. - Feb. 2014

This doubles up the challenge of making farming

on these fragmented pieces of land gainful, if not
viable. This calls for innovative solutions in terms of
production, marketing and access to various markets.

Average land holding size - State-wise

Analysis

Nagaland and Punjab. However, the intensity of

reduction varies across States. In Bihar and Kerala,
the average size of holding fell by more than three
times during the last four decades, whereas in
Andhra Pradesh, Karnataka, Madhya Pradesh and
Maharashtra, it has reduced by more than two times
(Graph 4).

The declining trend of average size of land holding

at the all India level conforms to all states except

During the same period, the average land holding

size increased in the marginal farmer category in

Together, marginal (<1 ha) and small (1-2 ha) farmers operate 44% of the cultivated area in the country (2010-11).
Source: Agricultural Census, various rounds, GoI

Department
of Economic Analysis and Research

NABARD Rural Pulse

Issue - I, Jan. - Feb. 2014

Himachal Pradesh, Odisha, Punjab and West Bengal.

This needs to be probed further as it confronts the
logic of increasing fragmentation of land consequent
to population pressure on it.
In the small farmer category, the average size of
holding has increased in Odisha, Punjab and West
Bengal. In the large farmer category (more than
10ha.), the average size of holdings has increased
in the States of Arunachal Pradesh, Assam, Gujarat,
Haryana, Kerala, Odisha, Tamil Nadu and West
Bengal between 1970-71 and 2010-11.

Implications
The increase in the average size (of land holding) in
the large farm category is perhaps easier to explain
than the increase in average size in the marginal and
small farm category particularly in Odisha, Punjab
and West Bengal. Is this an indicator of consolidation
of land holdings happening in these select States?
Does this also signal that consolidation is happening
through the lease market route?
The average size of large category land holdings
indicate that huge potential exists to scale up
agriculture wherein corporatisation of agriculture can
be an independent intervention that can trigger the
sector. However, more studies and attention need to
be drawn to this aspect.
In Odisha and West Bengal, out of the five land
size categories, in four categories the average size
of holdings has increased between 1970-71 and
2010-11 (only in 2 to 4 ha. and 4 to 10 ha. in Odisha
and West Bengal, respectively the average size
has declined). Certainly, this is an indicator that in
both the States, the dynamics of the land market is
working very differently compared to other States.
The average size of land holdings for marginal and
small category in Punjab has increased in the period.
This has been reflected in the increase in the overall
average size of holdings in the State (2.89 to 3.77 ha.).
Given that Punjab is predominantly a progressive
agricultural State, the changing positive signals (in
terms of increase in average size of holdings) needs
to be probed further to appreciate the issue.

Changes in Operational holdings and

area operated
Though the increase and/or decrease in the operated
area and operational holdings gets reflected in

Department of Economic Analysis and Research

the average land holding size, a few interesting

observations emerge, once we analyse both the
parameters separately.
The total number of operational holdings increased
from 71.01 million (1970-71) to 137.76 million (201011) holdings. The total operated area across land
size categories decreased from 162.31 million ha.
in 1970-71 to 159.18 million ha. in 2010-11, i.e.
suggesting a total of 3.13 million ha has gone out
of cultivation. It is vital to recognise that if available
fertile lands go out of cultivation especially when the
demand for food grains are expected to peak to 307
million tonnes by 2020 from the existing level of 245
million tonnes one would be left with limited options.
States of Arunachal Pradesh, Bihar, Goa, Jammu
& Kashmir, Kerala, Madhya Pradesh, Maharashtra,
Odisha, Tamil Nadu and Uttar Pradesh have
experienced a decline in operated area, whereas it
has increased in States of Andhra Pradesh, Assam,
Haryana, Himachal Pradesh, Karnataka, Manipur,
Meghalaya, Nagaland, Rajasthan, Tripura and West
Bengal resulting in a net reduction at the All India
level.
In Punjab, there has been a decline of 24 per cent in
the total operational holdings in the last four decades.
The marginal and small category holdings decreased
by 68 per cent and 25 per cent, respectively in
the State. Thus the number of marginal holdings
decreased quite sharply in the State during the
period. Interestingly, the data further reveals that
though there was a decline in the marginal category
operational holdings between 1995-96 and 2001-02,
since 2001-02, there has been a steady increase in
the number of operational holdings in this category.
The last four decades also saw a decline of 55 per
cent and 28 per cent in the area operated by marginal
and small farmers in Punjab. Thus, the dynamics of
the land market has undergone a change in Punjab
over the last decade.
The number of operational holdings in the small
farmer category decreased in Bihar, Kerala and
Odisha between 1970-71 and 2010-11. Analysis also
reveals that in the case of both Bihar and Kerala,
there was a decrease in this category between
2001-02 and 2005-06 and the trend got intensified
between 2005-06 and 2010-11. However, for Odisha,

NABARD Rural Pulse

Issue - I Jan. - Feb. 2014

the decrease has only occurred during 2005-06 and

2010-11. For these States, to a large extent, this can
be explained by the huge increase in the number
of operational holdings in the marginal category in
percentage terms.
In Nagaland too, in the marginal category, there
has been a decline in operated area and number of
operational holdings.
In Goa, across land size categories, there has been
a decrease in the operational holdings and operated
area during the period 1970-71 and 2010-11. This
is reflective of the economy in Goa which is heavily
skewed in favour of the Service (Tourism) sector.
Thus, the case of Goa is not comparable with other
States where there has been a decline.

What policy options exist ?

(a)
The tenancy laws as they exist need to be
tuned to current realities including the reducing
average size of holdings. The tenancy laws presently
do not adequately cover the rights of the owner
and this is one of the major factors inhibiting the
emergence of vibrant land lease markets. In States
like Punjab, there are visible traces of reverse
tenancy which also need to be taken into account.
The existence of a vibrant lease market would help in
tiding over the problems of reducing average size of
land holding, absentee landlordism, reverse tenancy
problems, etc..
(b)
The declining average size (1.16 ha.) of land
holding raises concerns for viability of such small

farm holdings. This aspect gets more pronounced

in the case of marginal farms where the average
size is a mere 0.38 ha., furthering the concerns of
investments and its viability. One plausible solution
therefore, to confront the challenge, is collectivisation;
which could perhaps attract private investment flow
into agriculture. However, forming and nurturing
collectives (groups) has to be done with caution
not merely for the costs involved in forming such
collectives and groups, but also the scale that is
needed. Policy needs to bring about clarity on these
aspects viz; the costs likely to be involved and the
agencies suitable for this task.
(c) The trend also brings to focus marginal
category of farmers as a separate and independent
category forming 67 per cent of the operational
holdings. Perhaps the time has come to look at this
category distinctly as separate from small farmers
(1-2 ha.) and devise interventions be it for production,
marketing or access to various markets. Producers
Organisations, JLGs are all offsets of this latent need
to collectivise.
(d) Farm mechanisation suited to the needs
and requirements of marginal and small farmers is
required. Obviously, this calls for supporting farm
mechanisation which is in tune with the needs of small
farm implements, machines, etc., and encouraging
joint use or custom hiring of machinery. This is
perhaps a way to make farm investments viable in
a scenario of reducing average size of agricultural
holdings. Policy needs to orient itself towards these
developments.

Disclaimer: NABARDs Rural Pulse is a publication of the Bank. The opinions expressed in the publication, are
that of the Research Team and does not necessarily reflect those of the Bank or its subsidiaries. The contents can
be reproduced with proper acknowledgement. The write-up is based on information & data procured from various
sources and no responsibility is accepted for the accuracy of facts and figures. The Bank or the Research Team
assumes no liability, if any person or entity relies on views, opinions or facts & figures finding place in the document.

Prepared by Nirupam Mehrotra, Assistant General Manager, Department of Economic Analysis

and Research, NABARD, Head Office: Plot No. C-24, G Block, Bandra-Kurla Complex, Bandra (E),
Mumbai- 400051.
Publisher : Dr. B S Suran, Chief General Manager, Department of Economic Analysis and Research,
NABARD, Head Office: Plot No. C-24, G Block, Bandra-Kurla Complex, Bandra (E), Mumbai- 400051
www. nabard.org.

email ID : dear@nabard.org

Department
of Economic Analysis and Research